PRESIDENT of the Jamaica Agricultural Society (JAS) Lenworth Fulton has urged the Government to dump the proposal for a temporary suspension of the common external tariff (CET) and additional stamp duties (ASD) on imported leg quarters.
In Parliament on Tuesday, Minister of Agriculture Pearnel Charles Jr outlined a raft of measures to respond to the looming increase in the price of chicken meat including the suspension of duties on leg quarters to make poultry more affordable to consumers.
“Currently, the price of leg quarters within the local market is at $360 per pound, while we would be able to import leg quarters at $100 per pound and have consumers paying roughly $160 per pound,” Charles told Parliament.
But in a response on Wednesday, Fulton argued that any such move “could prove even more damaging to Jamaica socially and economically than the novel coronavirus pandemic”.
According to Fulton, the suspension of the duties on leg quarters would place the progress and investment made by more than 150,000 small farmers in jeopardy.
“They took their remittances, 'partner pay outs', severance pay, small business and family loans and other income and invested in the construction of chicken houses and the production of poultry.
“And while the larger poultry companies may withstand the impact of this drastic measure, our small farmers who are currently producing chicken for sale at $240 - $290 per pound clearly will not,” said Fulton.
“The proposal by the honourable minister for the removal of duties on imported leg quarters will effectively eliminate the market for small poultry farmers and erode the integrity and sustainability of the local poultry sector which all stakeholders, led by the ministry, have worked so hard to build over the last two and a half decades.
“The livelihood of thousands of Jamaicans will be at risk and the fresh, wholesome chicken produced by these farmers will remain in their freezers, or at best have to be sold at a price to compete with the imports, thereby robbing them of recovering their investment, bringing financial ruin for many and exacerbating the ongoing crisis with violent crime,” added Fulton.
The JAS president argued that other players in the agricultural sector, including the more than 500 farm store owners and their own ecosystems, who base their livelihood on the sales of feed and chicks and associated products.
“The production of the high volumes of poultry feed subsidises the production cost of the much smaller volumes associated with other animal feeds. With the reduction in poultry feed will come higher prices for all animal feeds, as there will be no benefit of economies of scale to be realised from such low volumes of feed production.
“And the downward spiral of the livestock industry will commence. When you compromise the poultry sector in this way, pig farmers, ruminant farmers, cattle farmers are all left expose,” said Fulton even as he commended Charles for the announcement of a $50 million subsidy to cover various input costs for poultry farmers.
“It is this type of thinking that the industry needs more of. But that, respectfully, will not in and of itself, offset the devastation,” argued Fulton.
He added: “We implore the Honourable Pearnel Charles Jr to have broad consultation across the industry. Meet with the JAS; meet with the small farmers and their families; speak with RADA (The Rural Agricultural Development Authority) and Jamaica 4H Club members, so as to have a better understanding of the impact and ramifications of implementing a policy such as this, in order to assess the degree of fallout in the sector”.
In the last 12 months, the price of chicken meat supplied has increased by approximately 17 per cent, moving from an average of $530 per kilogramme to just under $620 per kilogramme currently.
At the prices outlined by Charles for leg quarters, if the duties were suspended, leg quarters will cost roughly half the price of whole chicken and locally produced leg quarters.
Following his presentation in Parliament Charles told the Jamaica Observer that the announcement is to let consumers know the Government is monitoring the situation and will be ready to act.
He, however, said he will be going into negotiations first with stakeholders in the poultry industry before making a final decision. But he stressed that the measure would be temporary “until the local market recalibrates to normal levels, where supply matches demand as was successfully done before when the country faced a similar crisis”.